This excerpt taken from the VLG 10-K filed Sep 28, 2006.
On June 30, 2006, Valley adopted the Emerging Issues Task Force (EITF) No. 04-10, Determining Whether to Aggregate Segments That Do Not Meet the Quantitative Thresholds. The adoption resulted in Valley refining its aggregate of operating segments, as defined in SFAS No. 131 into four reportable segments: Hard Goods, Packaged Gases, Propane and Variable Interest Entities. Hard goods consist of welding supplies and equipment, safety products, and MRO supplies. Packaged gas sales include industrial, medical and specialty gases such as: nitrogen, oxygen, argon, helium, acetylene, carbon dioxide, nitrous oxide, hydrogen, welding gases, ultra high purity grades and special application blends. The propane segment consists of the packaging and distribution of propane gas to residential, commercial and industrial customers. Cylinder rent is derived from cylinders, cryogenic liquid containers, bulk storage tanks and tube trailers and is included in either industrial gases or propane, depending on gas provided.
Effective with the adoption of FIN 46R and the required consolidation of certain variable interest entities effective March 31, 2004 (See Note 1), Valley has a Variable Interest Entities Segment. Since the variable interest entities are distinct businesses, the financial information for this segment is maintained and managed separately. The results of operations and assets for each of these segments are derived from each companys financial reporting system. All intercompany activity is eliminated in consolidation.
The Variable Interest Entities reportable segment, including West Rentals, Inc., G.E.W. Real Estate LLC, RealEquip-Lease LLC, Acetylene Products Corporation and Plymouth Holding LLC, primarily purchases, develops, sells and/or leases real estate (See Note 16).